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Home › Accounting Careers › Environmental Accountant

Learn to become an environmental accountant 

The concept of environmental accounting has several different applications.  

Many companies, nations and other large organizations have a vested interest in understanding their environmental costs and performance.  

“The term environmental cost has at least two major dimensions,” said the Environmental Protection Agency (EPA) in their primer about environmental accounting. “It can refer solely to costs that directly impact a company’s bottom line, or it also can encompass the costs to individuals, society and the environment for which a company is not accountable.” 

Tracking and acting on this data can be referred to as environmental accounting. The truth is, however, that the concept of environmental accounting has several different applications.  

Though the term “environmental accountant” is not a standardized job title, finance professionals can work in the field of environmental accounting.  

What is environmental accounting? 

Environmental accounting can refer to several different but related concepts depending on the context in which the term is used: 

• National income accounting: In a national economic context, environmental accounting may refer to a nation’s consumption of natural resources—both renewable and nonrenewable—and can therefore be thought of as “natural resource accounting.” 
• Financial accounting: Companies, especially publicly held corporations, must prepare financial reports for investors, lenders and more. “Environmental accounting in this context refers to the estimation and public reporting of environmental liabilities and financially material environmental costs,” the EPA said. 
• Management accounting: Management accounting refers to the collection and analysis of financial information for internal purposes. “Just as management accounting refers to the use of a broad set of cost and performance data by a company’s managers in making a myriad of business decisions, environmental accounting refers to the use of data about environmental costs and performance in business decisions and operations,” the EPA said.  

People are most often referring to the third context when discussing environmental accounting—how an individual entity like a business or corporation analyzes their environmental costs and performance and applies that information to business decisions.  

“Environmental accounting can be employed by firms large and small, in almost every industry in both the manufacturing and services sectors. It can be applied on a large scale or a small scale, systematically or on an as needed basis. The form it takes can reflect the goals and needs of the company using it,” the EPA said.  

Environmental accounting in action

So how does environmental accounting actually work? In reality, it can look very different depending on the scale and scope of its application. Environmental accounting can be applied to an entire company or right down to an individual process (a production line, for example) or system (such as lighting, packaging and more).  

Identifying environmental costs

The first step in all scenarios is identifying environmental costs. This is not always an easy task when you realize how easily environmental costs can be missed or fall into gray areas. Plus, certain costs (costs to a company’s image or reputation, for example) are much more difficult to measure than others.  

Costs required to comply with environmental laws or remediate environmental impacts can be clearly identified as environmental costs. But what if a company’s production equipment is a type of “clean” technology—should the cost of maintaining that equipment be considered environmental if it’s an energy-efficient technology?  

“The goal of environmental accounting is to increase the amount of relevant information that is made available to those who need or can use it,” the EPA said. “The success of environmental accounting does not depend on ‘correctly’ classifying all the costs a firm incurs.” 

Instead, companies can and should define what constitutes an environmental cost for them depending on their specific goals. This may require treating a cost as environmental for some purposes but not for others.  

“For example, if a firm wants to encourage pollution prevention in capital budgeting, it might consider distinguishing environmental costs that can be avoided by pollution prevention investments from environmental costs related to remedying contamination that has already occurred,” the EPA said.  

Applying environmental accounting

Once environmental costs and goals are identified, companies can apply this information in several different ways: 

• Cost accounting: Quantifying and allocating those costs to the appropriate product, process, system or facility responsible for them so that they are clearly apparent to relevant managers and stakeholders.  
• Capital budgeting: Using environmental costs to identify longer term environmental benefits and revenue.  
• Process or product design: Anticipate environmental costs to facilitate the design of a new product or process that is environmentally preferable.  

How to pursue an environmental accounting career

The role of an environmental accountant is somewhat nebulous. Rarely is one single person responsible for a business’s environmental accounting efforts.  

“Companies will likely want to assemble cross-functional teams to implement environmental accounting, bringing together designers, chemists, engineers, production managers, operators, financial staff, environmental managers, purchasing personnel and accountants who may not have worked together before,” the EPA said. “Because environmental accounting is not solely an accounting issue, and the information needed is split up among all of these groups, these people need to talk with each other to develop a common vision and language and make that vision a reality.” 

Still, people that are interested in this field have several professional routes they may take.  

How much can I make?

Because environmental accounting is such a niche field and inconsistent job title, the U.S. Bureau of Labor Statistics (BLS) does not have salary data for environmental accountants specifically. They do, however, report that the median annual salary for accountants and auditors is $81,680 according to their 2024 Occupational Employment and Wage Statistics.  

Resources to learn more

If you want to find out more about environmental accounting, consider checking out the following resources:

• The United States Environmental Protection Agency (EPA) develops and enforces environmental regulations, studies environmental issues, publishes environmental information and more. In addition to their many publications, they have an extensive document about environmental accounting as a business management tool.  

• The System of Environmental-Economic Accounting (SEEA) is an accepted international standard for environmental-economic accounting developed by the United Nations (UN) and other international entities. The SEEA organizes and presents statistics on the environment and its relationship with the economy.

• The American Institute of CPAs and The Chartered Institute of Management Accountants (AICPA & CIMA) is the go-to membership and credentialling organization for accountants and other finance professionals. 

• The Association of Chartered Certified Accountants (ACCA) is an international accountancy membership organization devoted to advancing the accounting profession worldwide. ACCA advocates for positive global change through accountancy, and promoting sustainability is one of their primary action items in this regard.  

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